McClendon is known as one of the energy industry’s biggest risk-takers. Forbes magazine last year called him “America’s most reckless billionaire.” He founded the company in 1989, going on buying sprees that eventually amounted to a portfolio of oil and gas fields that covers an area half the size of New York State.
Along the way, McClendon has outspent cash flow in 19 of 21 years, relying on asset sales or financing transactions to stay afloat. That has sometimes left the company, with unsecured debt rated as junk by Standard & Poor’s and Moody’s Investors Service, exposed to swings in oil and gas prices. Beset by low oil prices, the company put itself up for sale in 1998, failing to secure a buyer.
Chesapeake has had negative cash flow in 19 of 21 years and needed asset sales or additional financing to keep running. It's no wonder the traditional banking mentality at Morgan led to Chesapeake avoidance, while the deal-oriented investment bankers at Goldman loved Chesapeake.